A customer prepays for electronic tokens that are anonymous and backed by a bank or financial institution like eCash as recognized currency and stores it on the electronic wallet on his computer, mobile phone, etc. Before making a request for eCash currency, a customer installs a eCash software on the computer. The software sends request to the bank that backs up for the currency. The bank approves the request, generates the currency and sends it into the customer’s eCash wallet. To spend eCash, the customer makes purchase at a merchant site that accepts eCash. The merchant sends confirmation to the customer and concludes the transaction upon the customer’s approval. The merchant sends the currency to the eCash system for verification and deposit, initiating a confirmation message to the consumer that the payment has been accepted(http://www.digicash.com/Solutions/eCash_Currency.asp ).

With the public key/private key encryption system, SSL protocol establishes a secure transmission of information between a browser and a server. And so, it ensures information is free from the peeking of a third party. However, it does not authenticate that the party behind the storefront is the rightful merchant ( Korper and Ellis 142). For example, a wrongdoer can easily obtain a domain name http://www.citybank.com that can be mistaken as the real bank http://www.citibank.com. Through such mean, the wrongdoer can gather credit card numbers and abuse them far before the card holders notice these flouts. Also, it does not verify that the customer is the rightful card owner, and that whether there is sufficient credit on the card. ( Sweet ).

Another payment protocol, SET ( Secure Electronic Transaction ) is a standardized industry-wide protocol for secure transmission of sensitive information over a public network. For online payment, it provides an extra layer of security by "hiding card number from the merchant and integrate information flow all the way from customer to merchant to merchant’s financial institution to credit card issuer’s bank"( Manasse Slide11).

Using a wallet software installed on his computer, the customer transfer fund from his bank account or his credit card account into his or her wallet software. Then the wallet automatically debits a micro sum of fund from the balance for every purchase made at a web-based store. Here are some business model built upon debit micro payment system. For further details on how it works, please visit http://www.millicent.com , http://www.qpass.com, and http://www.cybergold.com.

"Electronic checks are signed and endorsed using digital certificates. The certificates authenticate the payer, the payer's bank, and the payer's bank account. Customers register with a third-party account server before they are entitled to write electronic checks. Once registered, a customer can contact a seller and send an electronic check for the amount needed. The check and its digital certificates authorize the transfer of funds from the account against which the check was drawn to the account to which the check was deposited. It is really quite similar to using an ATM card at a retail establishment"( Sweet).

"Some new (Fall 1999) free email-based payment systems, including PayPal and Flooz, bill the sender's credit card or bank account, or deduct the payment from an account prepaid by check or money order. The recipient will be notified by e-mail. PayPal recipients may receive payment by check, or have it directly deposited to a bank account; Flooz recipients may use their payments at certain online merchants" (http://www.transaction.net/payment/micro.html ).

A merchant register represents the software that the merchant uses to exchange payment and order information with the customer. Most of merchant registers support various payment methods, security protocol like SET and SSL; and integrate completely with a merchant’s storefront; and is supported by a wide variety of financial institutions. VPOS of VeriFone , CommercePoint eTill of IBM, and CashRegister of CyberCash are some versions of merchant register (Korper and Ellis 137).

An Internet Payment Service acts as an intermediary between the merchant register and the financial institution. The service provided by companies like CyberCash or VeriFone delivers the payment information from merchant’s storefront through banking network. Thus it enables the merchant to accept payments. An quality internet payment service provides SSL protocol security and SET encryption and authentication. Also, it features real-time payment methods, scalability in transaction volumes and payment features, flexibility in payment methods and has a good relationship with diverse financial institutions ( Korper And Ellis 138).

"The final phase of enabling electronic transaction is to set up credit card verification system. Each solution vendor has specific instructions for incorporating verification services into its commerce software. As an example, let us walk through the CyberCash procedure for implementing credit card verification. The merchant registers withCyberCash,downloads the software, and applies for a merchant bank account. The bank accepts the application and then notifies CyberCash. CyberCash enables cash register functionality and e-mails the merchant a notification. The merchant configures the storefront for CyberCash and retrieves setup information from CyberCash, and enters it into the storefront and submits a test transaction. Assuming that everything works, CyberCash activates the service upon the merchant’s request. Finally the business to consumer e-commerce is up and running"( Korper and Ellis 138).

http://www.digicash.com/Solutions/eCash_Currency.asp.

http://www.transaction.net/payment/micro.html

Sweet, Lisa. Internet Business http://www.zdnet.com/enterprise/e-business/